Cheapest Income Protection Insurance
Cover through super may not be enough, so it’s a good idea to look elsewhere
While income protection insurance may be available through your superannuation fund, actuaries Rice Warner found a big gap exists between the level of cover needed and the level provided through super. In fact, this gap is estimated to be at around 17% of income protection needs.
Rather than top up income insurance through your super, it’s possible to take out standalone insurance. Not only does this mean more of your super savings go towards funding retirement, it also offers the advantage of tailoring cover more precisely to your needs. As premiums on income protection insurance are typically tax deductible, the cost of cover can be more affordable than it first appears.
ClearView Income Protection, which also won this award in 2017, allows policyholders to receive a monthly benefit of up to 75% of your average income if you are unable to work because of illness or injury. Choose between stepped premiums that increase as you age or level premiums until age 65, at which point they become stepped.
ClearView offers the flexibility to reduce premiums by adjusting the waiting period before benefits kick in and/or the length of time you receive benefits. The longer the waiting period and the shorter the benefits period, then the lower the premiums will be. Just be sure that you could cope financially with the waiting period you nominate.
Benefits paid by ClearView are automatically increased each year in line with inflation, so you won’t fall behind financially because of rising living costs.
TAL’s Income Protection Plan offers a number of ways to tailor cover to suit your needs. If you’re a keen sports player for instance, TAL’s sports cover provides protection if you can’t work because of, say, a torn hamstring copped while running around a tennis court.
TAL doesn’t require medical tests to take out income protection cover. That said, purchasing a policy does involve answering a few questions about health and lifestyle. As with all types of insurance, it pays to be honest to avoid any knockbacks if you have to make a claim.